Home / Business / Money / Videocon sells two spectrums to Idea for Rs 3,310 cr

Videocon sells two spectrums to Idea for Rs 3,310 cr

Videocon in a two-part deal sold two of its spectrum – Gujarat and west Uttar Pradesh – to the telecom company Idea at a valuation of Rs 3,310 crore. This will be first deal post the government came out with spectrum-sharing regulations in September.

Out of the four key circles owned by company, Videocon will announce deals to exit two more – East UP and Bihar – in coming days.

Idea will reportedly launch 4G LTE services in acquired circles soon.

Venugopal Dhoot Chairman of Videocon told CNBC-TV18 that the cash from the deal will be utilized partly to reduce the company’s debt and partly for business development.

The company will announce deal for its East UP and Bihar circles in coming days.
The management he company has good customer base in other two circles – Madhya Pradesh and Haryana – and plans to launch 4G services in these circles soon.

Rajan Mattews, director General of COAI says that financial issues, due diligence and ownership issues will need to be discussed by both companies. However, he is happy that consolidation is taking place in telecom on expected lines.

Below is the transcript of Venugopal Dhoot and Arvind Bali’s interview with Prerna Baruah on CNBC-TV18.

Q: Tell us about the spectrum sharing is what you are saying or trading with Idea Cellular. In which two circles that you have done the deal?

Bali: We have done it for Gujarat and Uttar Pradesh West – these two circles – we have done spectrum trading and this has been done at a total valuation of Rs 3,310 crore.

Q: There were also speculations that Videocon is likely to exit in fact in most of the circle barring Punjab and this has been quite in the news reports, but are you also looking at any other?

Dhoot: We have over seven circles, Punjab circle is well-developed circle. It has got huge valuations, so at the moment we are not selling. Then two more circles there are opening, customers are there, four Indian customers, two to three foreign customers are there.

They want to buy it, so at appropriate time, we will sell those also. And two – Madhya Pradesh and Haryana – are very good circles and there we have a lot of customers.

Bali: So, Madhya Pradesh and Haryana, these are two circles where we have got a good customer base and we will be launching 4G services there with spectrum sharing arrangement. And Uttar Pradesh East and Bihar, these two circles there are already discussions at very advanced stage and very shortly, you will hear that we will be announcing our deal done on that.

Q: The deal valuation is roughly around Rs 3,300 crore?

A: Rs 3,310 crore and whereas our total telecom business we are valuing around Rs 14,000 crore. Step by step, we will be realising that and we will be continuing with our National Long Distance (NLD), International Long Distance (ILD) business which is already a Rs 1,000 crore plus business, we will be continuing our enterprise business, fibre to the home (FTTH) and broadband and all those businesses as well.

Q: Talking about your gross debt, how much will the debt come down to?

A: This much cash is coming, then we have got an insurance company also selling. So, first we are collecting a lot of cash and definitely that will be reduced and some of the money will utilised for the business purpose also.

Q: But what is the quantum? How much will it come down to?

A: The quantum I do not know, I am not a chartered accountant, I am an engineer. That we will talk sometime.


Check Also

Rupee recovers 6 paise to 67.01

The rupee today recovered some lost ground by rising 6 paise to ...

Notes ban to have positive impact on economy

NEW DELHI: The government’s demonetisation move has led to widespread adoption of ...